US Week in Review - Week ending 15 May 2014

The US Week in Review highlights this week’s developments and emerging issues in the financial reporting world and gives you direct access to relevant technical accounting guidance and thought leadership produced by EY.

What’s new from EY

The Society of Actuaries has proposed new mortality tables for benefit plan sponsors to use when measuring their benefit plan costs and obligations. If and when the proposal is finalized, sponsors would need to consider the changing trends in life expectancies when determining their best estimate of the mortality rate for measuring defined benefit plan costs and obligations. Our To the Point publication tells you what you need to know about the new mortality tables.

Our Transitioning to the 2013 COSO Framework for External Financial Reporting Purposes publication discusses key differences between the 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and COSO's original 1992 framework. It also highlights areas that management should consider in making the transition and provides a list of questions to help management evaluate whether existing systems of internal control address each of the 17 principles in the 2013 framework.

Standard Setter updates

Financial Accounting Standards Board (FASB)

New EITF member appointed

The FASB announced the appointment of Bret Dooley to its Emerging Issues Task Force (EITF). Mr. Dooley, who begins his term 1 June 2014, is a managing director and director of corporate accounting policies at JPMorgan Chase & Co.

14 May 2014 FASB meeting

Accounting for financial instruments: classification and measurement - The FASB decided to retain existing US GAAP requirements for recognition and measurement of foreign currency gains and losses on debt securities classified as available for sale (AFS) and the subsequent measurement of loan commitments, revolving credit lines and similar arrangements. In a change from the 2013 exposure draft, the Board decided that the assessment of a valuation allowance for a deferred tax asset (DTA) related to an AFS debt security that an entity expects to hold to recovery should be made in combination with the entity's other DTAs. The Board also agreed to provide additional guidance on application of the proposed practicability exception for equity investments lacking a readily determinable fair value. The FASB made partial decisions on other topics, but the staff will perform additional research before the Board votes on them.

The Board also discussed its project on Financial statements of not-for-profit entities.

15 May 2014 EITF education session

The Task Force discussed (1) Measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity (Issue 12-G) and (2) Determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity (Issue 13-G). No decisions were made.

Upcoming meetings

Education sessions

See the FASB's calendar for upcoming education sessions. No decisions are made at these sessions.

Securities and Exchange Commission (SEC)

Court denies emergency motion to stay SEC's conflict minerals rule

The US Court of Appeals for the District of Columbia Circuit denied an emergency motion from business groups seeking a stay of the effectiveness of all portions of the SEC's conflict minerals rule. As a result, affected registrants should be prepared to make their first conflict minerals filings by 2 June 2014, applying the SEC staff's recent guidance. Our To the Point, SEC moves ahead with modified conflict minerals reporting, describes this guidance.

Chief Accountant Paul Beswick to leave SEC

The SEC said Chief Accountant Paul A. Beswick will leave the agency to return to the private sector after a transitional period.

Mr. Beswick, who joined the SEC staff as senior advisor to former SEC Chief Accountant Conrad W. Hewitt in 2007, has served as chief accountant since 2012. During his tenure, he also served as deputy chief accountant in both the accounting and professional practice groups within the Office of the Chief Accountant and also served as staff director for the SEC staff's work plan for the consideration of incorporating IFRS into the US financial reporting system. Before joining the SEC staff, Mr. Beswick was a partner with Ernst & Young LLP.